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2011 DIGILAW 695 (BOM)

Arihant Agrotech v. Birla Cotsyn (I) Limited

2011-06-21

R.M.SAVANT

body2011
JUDGMENT:- Rule, made returnable forthwith. Heard finally with consent of the learned Counsel for the parties. 2. By the above petition filed under Articles 226 and 227 of the Constitution of India, the petitioner takes exception to the order dated 21/12/2010 passed by the learned Civil Judge, Senior Division (Ad hoc), Malkapur whereby the application (Exh.16) under Section 8 of the Arbitration and Conciliation Act, 1996 filed by the respondents herein, came to be allowed and the parties were relegated to arbitration in respect of disputes/differences that had arisen between them. 3. Shorn of unnecessary details, a few facts can be stated thus: The petitioner had entered into an agreement dated 29/6/2008 with the respondents in respect of ginning and pressing and it was agreed between the parties that the said work would be provided to the petitioner during the agreement period. However, it is the case of the petitioner that the respondents failed to provide the requisite work, resulting in the petitioner suffering a huge monetary loss. The petitioner therefore, issued a notice to the respondents demanding an amount of Rs.62, 21, 256/-. The said notice was replied to by the respondents by their letter dated 17/9/ 2009. Since notice was not complied with by the respondents, the petitioner was constrained to file a suit for recovery of an amount of Rs.1 crore and odd. The said suit came to be registered as Special Civil Suit No. 28/2010. 4. In the said suit, an application (Exh. 16) came to be if led by the respondents invoking Section 8 of the said Act contending that in Annexure' A', which is appended to the agreement dated 29/6/2008, there is a clause providing for arbitration in case of disputes/ differences between the parties in respect of 'he contracted work. The petitioner filed its reply to the said application and contended that though in the reply to the notice dated 17/9/2009, the respondents had not adverted to the said Annexure' A', in the application, surprisingly reliance was sought to be placed on the said Annexure' A'. which was purportedly appended to the said agreement. The petitioner, therefore disputed the said Annexure' A' containing the arbitration clause. which was purportedly appended to the said agreement. The petitioner, therefore disputed the said Annexure' A' containing the arbitration clause. The said application (Exh.16) was heard by the learned Civil Judge, Senior Division (Ad hoc), Malkapur and by the impugned order dated 21/12/2010, the "said application filed by the respondents came to be allowed and as mentioned hereinabove, the parties were relegated to arbitration in respect of the disputes/differences that had arisen between them. 5. The gist of the reasoning of the learned Judge was that there was no dispute in respect of the first page of the said agreement dated 29/6/2008 and since the words "Annexure "A" are written in hand and find a place both in the copy of the said document produced by the petitioner and the original. Produced by the respondents, it would have to be held that the said Annexure' A' was in fact appended to the said agreement dated 29/6/2008 and hence, there being an arbitration clause, the parties would have to be relegated to arbitration. 6. Heard Shri S.Y. Manohar, learned Counsel for the petitioner, and Shri Gordey, learned Senior Counsel for the respondents. It is the principal contention of Shri Manohar that once the document in question was disputed, it was for the respondents to prove the said document, i.e. Annexure "A" by leading evidence in accordance with the provisions of the Evidence Act. The learned Counsel contended that the impugned order passed on the application (Exh.16) proceeds on mere surmises and conjectures in a matter as serious as the existence of an arbitration agreement and the trial Court has erred in proceeding on the said basis. 7. Per contra, Shri Gordey, learned Senior Counsel for the respondents, sought to justify the impugned order of the trial Court by contending that there was no dispute in respect of the first page of the said document, the necessary corollary to it would be that it would have to be held and as rightly held by the trial Court that the said Annexure "A" was appended to the said document. 8. As can be seen, the entire controversy involved in the present petition is as regards the Annexure "A", which is supposedly annexed to the said agreement dated 29/6/2008, which comprises the clause for arbitration. 8. As can be seen, the entire controversy involved in the present petition is as regards the Annexure "A", which is supposedly annexed to the said agreement dated 29/6/2008, which comprises the clause for arbitration. Insofar as agreement dated 29/6/ 2008 is concerned, though the first page of the said document dated 29/6/2008 is identical, perusal of Annexure "A" ex facie discloses that it does not bear the signature of any person from the respondents' side. Since the petitioner has denied the very execution and existence of the said document, it was incumbent on the part of the respondents to prove the said document by a process known to law. The trial Court, in my view, has erred in proceeding on the basis of assumptions and has unnecessarily on the basis of surmises and conjectures come to a conclusion that the said Annexure "A" must have been appended to the agreement dated 29/6/2008 There is a merit in the submission of the learned Counsel appearing for the petitioner that in a matter as serious as existence of an arbitration clause, the Court cannot proceed on the basis of surmises and conjectures as the existence or non existence of the arbitration clause would have far reaching consequences for the parties. 9. In my view, in the facts and circumstances of the case, it would be just and proper to set aside the impugned order dated 21/12/2010 and remand the matter back to the concerned Court for a de novo consideration of the said application (Exh.16). On such remand, the respondents would be obliged to prove the said document by the process known to law. The petitioner would be entitled to its defences notwithstanding that an affidavit-in- reply has already been filed to the said application. 10. While allowing the above writ petition, the following directions are issued: (i) The impugned order dated 21/12/2010 passed by the Civil Judge, Senior Division (Ad hoc), Malkapur is set aside and the matter is remanded back to the learl1ed Civil Judge, Senior Division (Ad hoc), Malkapur for a de novo consideration of the application (Exh.16). (ii) In the light of the denial of the petitioner, the respondents would be obliged to prove the said document in accordance with law. (iii) The petitioner would be entitled to its defences by filing additional affidavit in reply and also leading evidence, if so advised. 11. (ii) In the light of the denial of the petitioner, the respondents would be obliged to prove the said document in accordance with law. (iii) The petitioner would be entitled to its defences by filing additional affidavit in reply and also leading evidence, if so advised. 11. Rule is accordingly made absolute in the aforesaid terms with parties to bear their respective costs. Petition allowed.